Of all world coins, India was one of the first countries to issue them, dating back to the 6th century BC. The currency in this country is known as the Indian Rupee, which is a name that comes from the word “rupa” or “rup”, which translates to “silver” in a number of Indo Aryan languages. Initially, the Indian Rupee was split into 155 annas, 64 paise, or 192 pies. In addition, the early issuance of the paper Rupee was through the Bank of Hindustan, the General Bank of Bengal and Bihar, and the Bengal Bank, as well as others.
Throughout history, the Indian Rupee was made of silver but in the 19th century when the gold standard was being used around the globe, having the Rupee made of silver caused complications. What happened was that people discovered large amounts of silver in the United States, as well as several European colonies that caused the value of silver to gold to decline. This meant the standard Indian Rupee was no longer worth as much outside of the country, which was called the “fall of the Rupee”.
During the Franco Prussian War of 1870 to 1871, gold was a hot topic, one that led to a significant divide between economies that were based on silver and those based on gold. This meant with so many silver reserves being discovered, currencies that were based on gold saw significant increase in value whereas those based on silver were declining in value quickly. For the Indian Rupee, which conducted the majority of trade with gold-based countries such as Britain, this was devastating. The price of silver dropped extremely low along with the exchange value of the Rupee.
The Indian Rupee had seen significant rise in value, as well as decline in value since that time, leading the government to realize that something had to be done. A lot of attention was being placed on the decimal system and in fact, the demand for the decimal system in India lasted for more than 100 years until finally in September of 1955, the Indian Coinage Act was amended whereby the decimal system would be formally adopted for the Indian Rupee. By 1957, this currency was officially a part of this system.
Since becoming an independent country in 1947, India has been faced with two serious financial crises causing the Indian Rupee to devalue even further in 1966 and again in 1991. In both situations, the country was hit hard financially and economically, unsure if it could recover. However between the years of 2000 to 2007, the Indian Rupee began to see a slowing of decline and it soon stabilized, trading between 44 and 48 to every $1 US Dollar.
Since 2007 to today, the Indian Rupee is still gaining back value, trading around 39 to the US Dollar. Although the financial crisis of 2008 caused the Indian Rupee to see a slight decline, with the world economy recovering, it appears once again the Rupee is holding its own.
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